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Thread: Centralized warehouse vs small warehouses

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    Diamond Member Corzhens's Avatar
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    Default Centralized warehouse vs small warehouses

    Some businessmen here are thinking of a decentralized warehouse where instead of having a central warehouse in Metro Manila, why not scatter some 5 or 6 small warehouses. That would definitely save them time, effort and money in terms of deliveries because the traffic is getting worse. With scattered warehouses, even small delivery vehicles can be used since the short distance of delivery can be done any time of the day (small vehicles are not covered by the truck ban).

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    Default Re: Centralized warehouse vs small warehouses

    I think it's okay since it does sound like there are benefits to it as well that can possibly outweigh or hopefully just equal the different advantages you get with a centralized area. The only thing I'd worry about if it were my decision to make was the distribution of supplies and how much I could prevent confusions between orders and listings or just the general accuracy of it all but with a solid enough system I think these problems can be avoided.

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    Default Re: Centralized warehouse vs small warehouses

    I think it depends on your business, and how widely you distribute. If you distribute over a large area then I don't see any sense in all products coming from one warehouse, as this would take time and money to do. However, if you are in a relatively small area then your deliveries could perhaps be achieved from just one warehouse alone. But there is no rule; you would have to work out the logistics for your own business and see which of the options would result in the largest profit margins for you.

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    Default Re: Centralized warehouse vs small warehouses

    Quote Originally Posted by GemmaRowlands View Post
    I think it depends on your business, and how widely you distribute. If you distribute over a large area then I don't see any sense in all products coming from one warehouse, as this would take time and money to do. However, if you are in a relatively small area then your deliveries could perhaps be achieved from just one warehouse alone. But there is no rule; you would have to work out the logistics for your own business and see which of the options would result in the largest profit margins for you.
    I agree. I think it's something that should be tailor made for each business to some extent even though there might be some general rule of thumb that should be followed as well. At the end if the day it should just be made to make it as efficient and as favorable to clients and customers as possible.

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    Default Re: Centralized warehouse vs small warehouses

    I think that it's a really smart idea, as long as it doesn't cost too much to rent the smaller warehouses as opposed to the one big one. For example if storage is $100 for a big warehouse but it's going to cost you 6 x $50 for 6 small warehouses with the same capacity, you really have to work your finances out to make a decision on whether that's worth it to your business or not.

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    Default Re: Centralized warehouse vs small warehouses

    Hello everyone,I have the following questions. This information can be acquired from manufacturing departments of any company or mechanical&chemical factories.
    I kindly request you to provide me with the following information in concern with any sections/divisions of your company.
    (1) Which quality system you use to maintain quality in your company?
    (2) What is the OTD (on time delivery) over any period of time?
    (3) Could you please compare your product costs with any of your market competitors?
    (4) Are you able to adhere to the plans or decisions you take?
    (5) Regarding productivity, what is the % of using capacity?
    (6) Is there continuous improvement over a period of time? Here I refer to areas such as treating wastes and recycling.
    (7) Are there any emissions during production phase( for example Nitrogen, Carbon dioxide) If there any, how do you manage to eliminate those wastes effectively.

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    Default Re: Centralized warehouse vs small warehouses

    I find big warehouses to be centralized in the form of their shipment. Whether domestic or imported shipments, they arrive in a central warehouse that would later farm out the goods to their other warehouses. It is just like having a warehouse for wholesale and some other warehouses for retail. This is very true in fastfood stores franchise where their supplies arrive in the central warehouse for later distribution. That way, the inventory is easier.

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    Default Re: Centralized warehouse vs small warehouses

    There are a lot of things that can affect the decision whether to centralise or not, for example, disaster recovery. Is it easier to keep service going with multiple small warehouses or to disaster-proof a large one as best you can? Then there is the issue of property taxes. If you get one location out of town, it is likely to be cheaper than multiple locations in town - unless you have to buy somewhere in the city centre to reach your whole route. There's also the issue of whether to centralise things like vehicle storage and maintence.

    It varies so much between business and location it is difficult to say which is better, because either can work well depending on how you implement it and what you are doing.

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    Default Re: Centralized warehouse vs small warehouses

    I think it relies upon your business, and how generally you appropriate. In the event that you circulate over a huge territory then I don't perceive any sense in all items originating from one distribution center, as this would require some serious energy and cash to do. In any case, on the off chance that you are in a generally little range then your conveyances could maybe be accomplished from only one stockroom alone. Be that as it may, there is no manage; you would need to work out the coordinations for your own particular business and see which of the choices would bring about the biggest net revenues for you.

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    Default Re: Centralized warehouse vs small warehouses

    A centralized base of operations is most beneficial if that warehouse is centrally situated between your customer locations. When it is, transportation can be handled competently because a single truck can be routed to deliver goods to multiple customers in one go.

    Small warehouses usually have different needs than big warehouses. They typically do not have warehouse organization systems that are data concentrated and involve high assets speculation. Prepared measures are more nebulous and management control is less rigid. Because of the difference in operational approach, different measures are needed in order to enhance productivity

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